Spot Bitcoin ETFs: A Look at ETFs Already Operating in Canada, Brazil, and Europe
Canada, Brazil, and Europe are among the jurisdictions that have approved and launched spot Bitcoin ETFs. In Canada, Purpose Investments, Evolve Funds, CI Galaxy, and 3iQ CoinShares are the key players in the market. Purpose Investments’ Bitcoin ETF, the world’s first backed by physically settled Bitcoin, has reached $1 billion CAD in assets under management. Evolve Funds, CI Galaxy, and 3iQ CoinShares also have their own Bitcoin ETFs, although their assets under management are currently lower.
In Brazil, QR Asset Management launched Latin America’s first spot Bitcoin ETF in June 2021. The fund, trading under the ticker QBTC11, has about $29 million USD in assets under management. Galaxy Digital also entered the Brazilian market with its Bitcoin ETF, IT Now Bloomberg Galaxy Bitcoin ETF, which has $15 million in assets under management.
Europe recently joined the spot Bitcoin ETF market, although it has been offering crypto exchange-traded notes (ETNs) for years. Switzerland-based 21Shares is a prominent player in the European market, with over $1 billion in assets under management across several crypto ETNs. The Jacobi FT Wilshire Bitcoin ETF, overseen by the Guernsey Financial Services Commission, became Europe’s first spot Bitcoin ETF. It measures the energy usage associated with Bitcoin and buys corresponding Renewable Energy Certificates.
Potential for US Bitcoin ETFs: Regulatory Hurdles and Market Manipulation Concerns
While spot Bitcoin ETFs have been approved in other jurisdictions, the SEC in the US has expressed concerns about fraud and market manipulation. The regulator recently delayed its decision on a proposed ETF by Ark Invest and 21Shares. However, other ETFs are still awaiting approval or further review. The SEC’s approval of a US spot Bitcoin ETF depends on the existence of a surveillance-sharing agreement (SSA) with a regulated market of significant size, such as the CME and Coinbase. Market participants believe that a US spot Bitcoin ETF could attract significant assets under management, potentially matching or exceeding the assets in Bitcoin futures products.
As spot Bitcoin ETFs continue to gain traction in Canada, Brazil, and Europe, US investors are hopeful that the SEC will eventually approve a similar product. While regulatory hurdles and concerns about market manipulation remain, the potential for a US spot Bitcoin ETF is significant. As other jurisdictions demonstrate the success of these products, it is likely that the demand for a US spot Bitcoin ETF will continue to grow.
Analyst comment
Positive news: The launch of Europe’s first spot Bitcoin ETF is a positive development for the market, indicating increasing acceptance and adoption of cryptocurrency investment products.
As an analyst, I predict that the market for spot Bitcoin ETFs will continue to grow, with more countries and jurisdictions approving and launching their own products. The potential for a US spot Bitcoin ETF is significant, as demonstrated by the success of similar products in Canada, Brazil, and Europe. However, regulatory hurdles and concerns about market manipulation may delay its approval. Overall, the demand for spot Bitcoin ETFs is expected to increase as investors seek accessible and regulated exposure to the cryptocurrency market.
